Voluntary tender offers (VTOs) are regulated by the
Communiqué on Tender Offers1 issued by the
Capital Markets Board (MB) in accordance with the Capital Markets
Law2. The communiqué entered into force on
January 23 2014 and regulates the principles applicable to
mandatory tender offers and VTOs in public companies.
A VTO can be launched for the acquisition of all or part of a
public company's shares. However, if a partial VTO results in
the acquisition of 'management control'3 over
the target, the offeror must make a mandatory tender offer for the
target's remaining shares. On the other hand, if management
control is acquired following a VTO made for all shares in the
public company, a mandatory tender offer is not needed.
The VTO application must be submitted to the CMB with the
documents listed in the communiqué and the VTO must be
launched within six business days of the CMB's approval. The
offeror can withdraw from the VTO up to the launch date.
The offer period must be between 10 and 20 business days. Upon
the target's application, the CMB can extend the offer period
for a maximum of 30 business days to enable the target's
general assembly to evaluate the offer.
New role for board members
In the event of a VTO, the target's board of directors must
prepare a report on the offeror's strategic plans towards the
target and the potential consequences thereof, including the
board's opinion on the VTO. This report must be publicly
disclosed on the business day before the VTO's launch date.
The communiqué sets forth no benchmark for the VTO price
and states that the offeror can increase the price up to the
business day before completion of the offer period. If the VTO
price is increased, the offer period is extended for two weeks. If
some shareholders sold their shares to the offeror before the
increase, the difference must be paid to such shareholders within
two business days of completion of the offer period.
If, after the announcement of the VTO and within three months of
completion of the offer period, the offeror (or parties acting in
concert with it) purchases the shares at above the VTO price, the
offer price must be redetermined. This must not be less than the
highest price paid by the offeror for the acquired shares.
The communiqué introduces the 'competing offer'
concept into Turkish legislation. Accordingly, a third party can
launch a competing offer within the offer period and the
shareholders that have accepted the original VTO can refrain from
selling their shares to the original offeror to the extent
they accepted the original VTO before
the announcement of the competing offer; and
the share transfer has not been
The communiqué clarifies the principles applicable to
VTOs and mandatory tender offers and strengthens the protection of
minority shareholders. In the near future competing offers may be
made in VTOs, which will shed light on the CMB's approach on
1. Published in the Official Gazette on January 23
2. Published in the Official Gazette on December 30
3. Under the Communiqué, the acquisition of
management control is defined as the acquisition (whether directly
or indirectly, single-handedly or together with others acting in
shares representing at least
50% of the company's share capital or the voting rights;
regardless of share
percentage, privileged shares entitling the holder to appoint or
nominate the majority of the board of directors.
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